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SECURITIES LENDING AGREEMENT ("Lending Agreement"), dated as of
, 1996 between ("Lender"), having its principal place of business at
, and The Chase Manhattan Bank, N.A. ("Chase"), having its principal place of
business at Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
It is hereby agreed as follows:
Section 1 - Definitions
Unless the context clearly requires otherwise, the following words
shall have the meanings set forth below when used herein:
a. "Account" shall mean the securities account established and
maintained by Chase on behalf of Lender pursuant to, as the case may be, a
separate custody agreement or a separate directed trust agreement ("Agreement")
between Chase and Lender, which Agreement provides, inter alia, for the
safekeeping of Securities received by Chase from time to time on behalf of
Lender.
b. "Agreement" shall have the meaning assigned thereto in Section
1(a) hereof.
c. "Authorized Investment" shall mean any type of instrument,
security, participation or other property in which Cash Collateral may be
invested or reinvested, as described in Section 5(f) hereof and Appendix 4
hereto (and as such Appendix may be amended from time to time by written
agreement of the parties).
d. "Authorized Person" shall mean, except to the extent that
Chase is advised to the contrary by Proper Instruction, any person who is
authorized to give instructions to Chase pursuant to the Agreement and any
mandates given to Chase in connection with such Agreement. An Authorized
Person shall continue to be so until such time as Chase receives Proper
Instructions that nay such person is no longer an Authorized Person.
e. "Borrower" shall mean an entity listed on Appendix 1 hereto,
other than an entity which Chase shall have been instructed to delete from list
pursuant to Written Instructions and as such Appendix may be amended in
accordance with Section 4(b) hereof.
f. "Business Day" shall have the meaning assigned thereto in the
applicable MSLA.
g. "Buy-in" shall have the meaning assigned thereto in Section
7(c) hereof.
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h. "Cash Collateral" shall mean fed funds, New York Clearing
House Association funds and such non-U.S. currencies as may be pledged by a
Borrower in connection with a particular Loan.
i. "Collateral" shall have the meaning assigned thereto in the
applicable MSLA, together with Cash Collateral.
j. "Collateral Account" shall mean, as the case may be, an
account maintained by Chase with itself, with any Depository or with any
Triparty Institution and designated as a Collateral Account for the purpose of
holding any one or more of Collateral, Authorized Investments, and Proceeds in
connection with Loans hereunder.
k. "Collateral Amount" shall have the meaning assigned thereto in
Section 5(c) hereof.
l. "Collateral Criterion" shall have the meaning assigned thereto
in Section 5(c) hereof.
m. "Depository" shall mean: (1) the Depository Trust Company,
the Participants' Trust Company and any other securities depository or clearing
agency (and each of their respective successors and nominees) registered with
the U.S. Securities and Exchange Commission or registered with or regulated by
the applicable foreign equivalent thereof or otherwise able to act as a
securities depository or clearing agency, (ii) any transnational depository,
(iii) the Federal Reserve book-entry system for the receiving and delivering of
U.S. Government Securities, and (iv) any other national system for the
receiving and delivering of that country's government securities.
n. "Difference" shall have the meaning assigned thereto in
Section 7(c) hereof.
o. "Distributions" shall have the meaning assigned thereto in
Section 3(b)(v) hereof.
p. "Dollars" shall have the meaning assigned thereto in Section
7(b) hereof.
q. "Due Date" shall have the meaning assigned thereto in Section
7(b) hereof.
r. "Insolvency Event" shall have the meaning assigned thereto in
Section 7(b) hereof.
s. "Letter of Credit" shall have the meaning assigned thereto in
the applicable MSLA and be issued by a bank listed on Appendix 2 hereto (as
such list may be amended by Chase from time to time on notice to Lender), other
than a bank deleted from such list pursuant to Written Instruction.
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t. "Loan" shall mean a loan of Securities hereunder and under the
applicable MSLA.
u. "Loan Fee" shall mean the amount payable by a Borrower to
Chase pursuant to the applicable MSLA in connection with Loans collateralized
other than by Cash Collateral.
v. "Market Value" shall have the meaning assigned thereto in the
applicable MSLA.
w. "MSLA" shall mean a master securities lending agreement
between Chase and a Borrower, pursuant to which Chase as agent lends securities
on behalf of its customers (including Lender) from time to time. A copy of
Chase's standard form of MSLA, including the international addendum thereto, is
annexed as Appendix 3.
x. "Net Assets" shall have the meaning assigned thereto in
Section 8 hereof.
y. "Net Realized Income" shall have the meaning thereto in
Section 8 hereof.
z. "Oral Instructions" shall have the meaning assigned thereto in
Section 10 hereof.
aa. "Proceeds" shall mean interest, dividends and other payments
and Distributions received by Chase in connection with Authorized Investments.
bb. "Proper Instructions" shall mean Oral Instructions and Written
Instructions.
cc. "Rebate" shall mean the amount payable by Chase on behalf of
Lender to a Borrower in connection with Loans collateralized by Cash
Collateral.
dd. "Return Date" shall have the meaning assigned thereto in
Section 7(c) hereof.
ee. "Securities" shall mean government securities (including U.S.
Government Securities), equity securities, bonds, debentures, other corporate
debt securities, notes, mortgages or other obligations, and any certificates,
warrants or other instruments representing rights to receive, purchase, or
subscribe for the same, or evidencing or representing any other rights or
interests therein and held pursuant to the Agreement.
ff. "Term Loan" shall have the meaning assigned thereto in Section
5(i) hereof.
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gg. "Triparty Institution" shall mean a financial institution with
which Chase shall have previously entered a triparty agreement among itself,
such Triparty Institution and a particular Borrower providing, among other
things, for the holding of Collateral in a Collateral Account at such Triparty
Institution in Chase's name on behalf of Chase's lending customers and for the
substitution of Collateral; provided, however, that any substituted Collateral
shall meet the then standards for acceptable Collateral set by Chase.
hh. "U.S. Government Security" shall mean book-entry securities
issued by the U.S. Treasury defined in Subpart 0 of Treasury Department
Circular No. 300 and any successor provisions) and any other securities issued
or fully guaranteed by the United States government or any agency,
instrumentality or establishment of the U.S. government, including, without
limitation, securities commonly known as "Xxxxxx Xxxx," Xxxxx Xxxx," "Xxxxxx
Xxxx" and "Xxxxxxx Xxxx".
ii. "Written Instructions" shall have the meaning assigned thereto
in Section 10 hereof.
Section 2 - Appointment, Authority
(a) Appointment. Lender hereby appoints Chase as its agent to lend
Securities in the Account on Lender's behalf on a fully disclosed basis to
Borrowers from time to time in accordance with the terms hereof and on such
terms and conditions and at such times as Chase shall determine and Chase may
exercise all rights and powers provided under any MSLA as may be incidental
thereto, and Chase hereby accepts appointment as such agent and agrees to so
act.
(b) Authority. Lender hereby authorizes and empowers Chase to
execute in Lender's name on its behalf and at its risk all agreements and
documents as may be necessary to carry out any of the powers herein granted to
Chase. Lender grants Chase the authority set forth herein notwithstanding its
awareness that Chase, in its individual capacity or acting in a fiduciary
capacity for other accounts, may have transactions with the same institutions
to which Chase may be lending Securities hereunder, which transactions may give
rise to actual or potential conflict of interest situations. Chase shall not
be bound to: (i) account to Lender for any sum received or profit made by
Chase for its own account or the account of any other person or (ii) disclose
or refuse to disclose any information or take any other action if the same
would or might in Chase's judgment, made in good faith, constitute a breach of
any law or regulation or be otherwise actionable with respect to Chase;
provided that, in circumstances mentioned in (ii) above, Chase shall promptly
inform Lender of the relevant facts (except where doing so would, or might in
Chase's judgment, made in good faith, constitute a breach of any law or
regulation or be otherwise actionable as aforesaid).
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Section 3 - Representation and Warranties
(a) Representations of each party. Each party hereto represents and
warrants to the other that: (i) it has the power to execute and deliver this
Lending Agreement, to enter into the transactions contemplated hereby, and to
perform its obligations hereunder; (ii) it has taken all necessary action to
authorize such execution, delivery, and performance; (iii) this Lending
Agreement constitutes a legal, valid, and binding obligation enforceable
against it; and (iv) the execution, delivery, and performance by it of this
Lending Agreement shall at all times comply with all applicable laws and
regulations.
(b) Representations of Lender. Lender represents and warrants to
Chase that: (i) this Lending Agreement is, and each Loan shall be, legally and
validly entered into, and does not and shall not violate any statute,
regulation, rule, order or judgment binding on Lender, or any provision of
Lender's charter or by-laws, or any agreement binding on Lender or affecting
its property, and is enforceable against Lender in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency or similar laws,
or by equitable principles relating to or limiting creditors' rights generally;
(ii) the person executing this Lending Agreement and all Authorized Persons
acting on behalf of Lender has and have been duly and properly authorized to do
so; (iii) it is lending Securities as principal and shall not transfer, assign
or encumber its interest in, or rights with respect to, any Securities
available for Loan hereunder; (iv) it is the beneficial owner of all Securities
or otherwise has the right to lend Securities; and (v) it is entitled to
receive all interest, dividends and other distributions ("Distributions") made
by the issuer with respect thereto. Lender shall promptly identify to Chase by
notice, which notice may be oral, any Securities that are no longer subject to
the representations contained in (b).
Section 4 - Borrowers
(a) MSLA. Lender hereby acknowledges receipt of the form of MSLA and
authorizes Chase to lend Securities in the Account to Borrowers thereunder
pursuant to an agreement substantially in the form thereof.
(b) Borrowers. Securities may be lent to any Borrower selected by
Chase in Chase's sole discretion, in accordance with the terms hereof. In that
connection, Appendix 1 may be amended from time to time by Chase on notice to
Lender.
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Section 5 - Loans
(a) Securities to be lent, Lending opportunities, Loan initiation.
All Securities of Lender held by Chase that are issued, settled or traded in
the markets that have been approved by Chase from time to time for purposes of
Chase's discretionary securities lending program shall be subject to the terms
hereof. Chase shall seek to assure that Lender receives a fair allocation of
lending opportunities vis-a-vis other lenders, taking into account the demand
for and availability of Securities, types of Collateral, eligibility of
Borrowers, limitations on investments of Cash Collateral, tax treatment, and
similar commercial factors. From time to time, Chase may lend to Borrowers
Securities held in the Account (except Securities that are no longer subject to
the representations set forth in Section 3) and shall deliver such Securities
against receipt of Collateral in accordance with the applicable MSLA. Chase
shall have the right to decline to make any Loans to any Borrower and to
discontinue lending to any Borrower in its sole discretion and without notice
to Lender.
(b) Receipt of Collateral, Collateral substitution. For each Loan,
Chase shall receive and hold Letters of Credit received as Collateral and Chase
or a Triparty Institution shall receive and hold all other Collateral required
by the applicable MSLA in a Collateral Account, and Chase is hereby authorized
and directed, without obtaining any further approval from Lender, to invest and
reinvest all or substantially all Cash Collateral. Chase shall credit, or
where applicable shall have a Triparty Institution credit, all Collateral,
Authorized Investments and Proceeds to a Collateral Account and Chase shall not
xxxx its books and records to identify Lender's interest therein, it being
understood, however, that all monies credited to a Collateral Account may for
purposes of investment be commingled with cash collateral held for other
lenders of securities on whose behalf Chase may act. Chase may, in its sole
discretion, liquidate any Authorized Investment and credit the net proceeds in
a Collateral Account. Chase shall accept substitutions of Collateral in
accordance with the applicable MSLA and shall credit, or where applicable shall
have a Triparty Institution credit, all such substitutions to a Collateral
Account.
(c) Xxxx to market procedures. (i) Chase shall require initial
Collateral for a Loan in an amount determined by applying the then applicable
"Collateral Criterion" (as defined below) to the Market Value of the Security
that is the subject of the Loan. The Collateral Criterion with respect to a
given Security shall be an amount equal to the then applicable percentage
(currently 102% for securities issued in the U.S. and 105% for securities
issued outside of the U.S.) of the Market Value of the Security (plus accrued
interest, if any, with respect to debt securities) which is the subject of a
Loan as determined as of the close of trading on the preceding Business Day.
(ii) Each Business Day Chase shall determine if the Market Value of all
Collateral received by Chase from a given Borrower in connection with all loans
to such Borrower from all lenders is at least equal to the aggregate amount
("Collateral Amount") determined by applying the applicable Collateral
Criterion to each security on loan to such Borrower from all lenders. (iii) In
accordance with general market practice, the Market Value of certain securities
(including, without limitation, U.S. Government Securities) whether on Loan or
received as Collateral, may be determined on a same day basis by reference to
recognized pricing services.
(d) Demand for additional Collateral. If the determination made
in Section 5(c)(ii) above demonstrates that the Market Value of all Collateral
received from a given Borrower is
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not at least equal to the Collateral Amount, Chase shall demand additional
Collateral from such Borrower in accordance with the applicable MSLA so as to
meet the Collateral Amount by making specific Loans; provided that, Chase may
from time to time establish de minimis guidelines pursuant to which a xxxx
would not be made even where the aggregate Collateral Amount has not been met.
(e) Changes in procedures applicable to Collateral. The
Collateral procedures set forth in Sections 5(b)-(d) above reflect Chase's
current practice and may be changed by Chase from time to time based on general
market conditions (including volatility of Securities on Loan and of securities
Collateral), the Market Value of Securities on Loan to a given Borrower, and in
accordance with general market practice and regulatory requirements. Chase
shall notify Lender of material revisions to the foregoing procedures.
(f) Investment of Cash Collateral. (i) Chase is hereby authorized
to invest and reinvest cash Collateral in accordance with the investment
guidelines (and the interpretations, procedures and definitions included
therewith) annexed hereto as Appendix 4. (ii) Authorized Investments are made
for the account of, and at the sole risk of, Lender. In that connection,
Lender shall pay to Chase on demand in cash an amount equal to any deficiency
in the amount of Collateral available for return to a Borrower pursuant to an
applicable MSLA.
(g) Lender's rights with respect to Securities on Loan;
Distribution and voting rights. (i) An amount equal to the amount of all
Distributions paid with respect to Securities on Loan that Lender would have
received had such Securities not been on Loan shall be credited to Lender's
account on the date such Distributions are delivered by Borrower to Chase. Any
non-cash Distribution on Securities on Loan which is in the nature of a stock
split or a stock dividend, shall be added to the Loan (and shall be considered
to constitute Securities on Loan) as of the date such non-cash Distribution is
received by the Borrower and shall be subject to the provisions of this Lending
Agreement; provided that the Lender may, by giving chase ten (10) Business
Days' notice prior to the date of such non-cash Distribution (or such different
amount of time as Chase may from time to time require on advice to Lender),
direct Chase to request that the Borrower deliver such non-cash Distribution to
Chase pursuant to the applicable MSLA, in which case Chase shall credit such
non-cash Distribution to Lender's account on the date it is delivered to Chase.
Without regard to the reference to "delivered" in the foregoing, the
"AutoCredit" provisions of the Agreement shall apply where a Borrower fails to
make a Distribution payment to Chase, the effect of which would be for Chase to
credit Lender's account with Distributions on the payable date. (ii) During
the term of any Loan, Chase will permit the Securities on Loan to be
transferred into the name of and be voted by the Borrower or others. Lender
shall not be entitled to participate in any dividend reinvestment program or to
vote proxies with respect to Securities that are eligible for Loan (whether or
not actually on Loan) as of the applicable record date for such Securities.
(h) Advances, overdrafts and indebtedness, Security Interest.
Chase may, in its sole discretion, advance funds on behalf of Lender in order
to pay to Borrowers any Rebates or to return to Borrowers Cash Collateral to
which they are entitled pursuant to the applicable MSLA. Lender shall repay
Chase on demand the amount of any advance or any other amount owned by Lender
hereunder plus accrued interest at a rate per annum not to exceed the rate
customarily
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charged by Chase for such loans at the time such loan is made and shall
otherwise be on such terms and conditions as Chase customarily makes such loans
available. In order to secure repayment of any advance or other indebtedness
of Lender to Chase arising hereunder, Chase shall have a continuing lien and
security interest in and to all assets now or hereafter held in the Account and
any Collateral Account (to which Lender is entitled hereunder) and any other
property at any time held by it for the benefit of Lender or in which Lender
may have an interest which is then in Chase's possession or control or in the
possession or control of any third party acting on Chase's behalf. In this
regard, Chase shall be entitled to all the rights and remedies of a pledgee
under common law and a secured party under the New York Uniform Commercial Code
and/or any other applicable laws and/or regulations as then in effect.
(i) Termination of a Loan. (i) Loans shall generally be terminable on
demand. With the prior approval of Lender, however, Loans may be made on the
basis of a reasonably anticipated termination date ("Term Loan") and without
providing for the right of substitution of equivalent Securities. Termination
of a Term Loan prior to its anticipated termination date by either Lender or
Borrower may result in the terminating party having to pay non-terminating
party damages based on the cost of obtaining a replacement loan. (ii) Chase
shall terminate any Loan of Securities to a Borrower as soon as practicable
after (a) receipt by Chase of a notice of termination of the respective MSLA;
(b) receipt by Chase of Written Instructions directing it to terminate a Loan;
(c) receipt by Chase of Written Instructions instructing it to delete from
Appendix 2 the Borrower to whom such Loans was made; (d) receipt by Chase of
Written Instructions advising that the Security subject to a Loan is no longer
subject to the representation contained in Section 3 hereof; (e) receipt by
Chase of notice advising that an Event of Default (as defined in the applicable
MSLA) has occurred and is continuing beyond any applicable grace period; (f)
whenever Chase, in its sole discretion, elects to terminate such Loan other
than a Term Loan; or (g) termination of this Lending Agreement. (iii) If
Securities which are the subject of a Loan being terminated are to be sold by
Lender, Written Instructions shall in no event be given to Chase later than the
trade date established by Lender for such sale or such earlier date of which
Chase may advise Lender from time to time with respect to particular markets.
Chase shall not be liable for any failure of a Borrower to return Securities on
Loans in a time fashion.
(j) Recordkeeping and Reports. Chase shall establish and maintain
such records as are reasonably necessary to account for Loans that are made and
the income derived therefrom. Chase shall provide Lender with a monthly
statement describing the Loans made during the preceding month, and the income
derived from Loans, during the period covered by such statement. A party shall
comply with the reasonable requests of the other party for information
necessary to the requester's performance of its duties hereunder.
Section 6 - Default by Borrower
(1) Chase may assume (unless it has actual knowledge to the
contrary) that any representations made by a Borrower in connection with any
Loan are true, that no event which is or may become an Event of Default (as
defined in the applicable MSLA) has occurred and that a Borrower has complied
with its obligations under the applicable MSLA. Subject to Sections 7(b)-(d),
Chase shall have no responsibility for the accuracy or completeness of any
information
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supplied, or for any breach of any obligation, by any Borrower under or in
connection with any MSLA or Loan. Chase shall not be liable as a result of
taking or omitting to take any action provided that Chase shall have carried
out its responsibilities hereunder in good faith. (ii) If any Borrower with
respect to any Loan affected pursuant hereto and pursuant to the applicable
MSLA fails to return any loaned Securities when due thereunder for reasons
other than relating to the solvency of the Borrower, Chase shall then take
whatever action its deems appropriate in accordance with general market
practice and Chase's reasonable judgment, including, but no necessarily limited
to, claiming compensation from such Borrower on behalf of Lender in the event a
trade executed by Lender fails on account of such Borrower's failure timely to
have returned Securities on Loan or, where Chase deems it necessary, such other
action as may be permitted by the applicable MSLA, including collecting any
applicable MSLA fails to return any Securities on Loan when due thereunder for
reasons relating to the solvency of the Borrower, Chase shall take such action
as its deems appropriate in accordance with Chase's reasonable judgment under
the applicable MSLA.
Section 7 - Standard of Care, Liabilities, Indemnification
(a) Standard of care, Liabilities. Except as provided in paragraphs
(b) and (c) hereof, Chase shall be liable for any costs, expenses, damages,
liabilities or claims (including attorneys' and accountants' fees) incurred by
Lender, except those costs, expenses, damages, liabilities and claims arising
out of the negligence, bad faith or willful misconduct of Chase. Chase shall
have no obligation hereunder for: (i) costs, expenses, damages, liabilities or
claims (including attorneys' and accountants' fees), which are sustained or
incurred by Lender by reason of any action or inaction by any pricing service,
any Depository or a Triparty Institution or their respective successors or
nominees; and (ii) any failure to perform any obligation due to any matters
beyond the control of Chase. In no event shall Chase be liable for indirect or
consequential damages or lost profits or loss of business, arising hereunder or
in connection herewith, even if previously informed of the possibility of such
damages and regardless of the form of action.
Except for any costs or expenses incurred by Chase in performing its
obligations pursuant to paragraphs (b) and (c) hereof any ordinary operating
expenses incurred by Chase in providing services hereunder, Lender shall
indemnify Chase and hold it harmless from and against any and all costs,
expenses, damages, liabilities or claims, including reasonable fees and
expenses of counsel, which Chase may sustain or incur or which may be asserted
against Chase by reason of or as a result of any action taken or omitted by
Chase in connection with operating under this Lending Agreement or enforcing
Lender's rights under the applicable MSLA, other than those costs, expenses,
damages, liabilities or claims arising out of the negligence, bad faith or
willful misconduct of Chase. The foregoing indemnity shall be a continuing
obligation of the Lender, its successors and assigns, notwithstanding the
termination of any Loans hereunder or of this Lending Agreement. Chase may
charge any amounts to which it is entitled hereunder against the Account, and
Lender shall be entitled to an accounting of all amounts so charged. Actions
taken or omitted in reliance upon Proper Instructions, or upon any information,
order, indenture, stock certificate, power of attorney, assignment, affidavit
or other instrument reasonably believed by Chase, in good faith, to be genuine
or bearing the signature of a person or
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persons believed, in good faith, to be authorized to sign, countersign or
execute the same, shall be conclusively presumed to have been taken or omitted
in good faith.
(b) Indemnification of Lender in respect to Distributions. If the
Borrower in respect of any Loan effected pursuant hereto and pursuant to the
applicable MSLA fails, as a result of its bankruptcy, insolvency,
reorganization, liquidation, receivership or similar event (each an "Insolvency
Event"), to remit to Chase for Lender's account any Distributions on or with
respect to Securities on Loan when due (the "Due Date") in accordance with such
MSLA and such Due Date occurs at least one day prior to an Insolvency Event
then Chase shall at its expense (subject to paragraph (d) hereof) and within
one (1) Business Day of the Due Date, undertake the following: (i) with
respect to Distributions in the form of cash, Chase shall credit Lender's
account with the full amount of such Distributions and (ii) with respect to
Distributions in the form of securities, Chase shall, at its option, either
purchase replacement securities (of an equal amount of the same issue, class,
type or series as the Distributions) on the principal market in which such
securities are traded or credit Lender's account with the market value in
United States dollars ("Dollars") of such Distributions on the Due Date as
determined by Chase in good faith. Market value shall be determined by Chase
in accordance with the applicable MSLA, including the computation of Dollar
equivalents where Securities on Loan and/or Collateral (and Proceeds) are
denominated in a currency other than Dollars.
(c) Indemnification of Lender in respect of Securities. If the
Borrower in respect of any Loan effected pursuant hereto and pursuant to the
applicable MSLA fails to return any Securities on Loan to Chase for Lender's
account when due thereunder (the "Return Date") which is the date of default,
then Chase shall, at its expense (subject to paragraph (d) hereof) and within
one (1) Business Day of the Return Date, credit Lender's account in Dollars
with the difference ("Difference") (where a positive number), if any, between
(x) the market value of such lent Securities on the Return Date (including, in
the case of debt Securities, accrued but unpaid interest), and (y) in the case
of Loans collateralized by (i) Cash Collateral, the greater of (A) the Market
Value of the Cash Collateral on the date of initial pledge as adjusted for any
subsequent marks-to-market through the Return Date and (B) the Market Value of
Cash Collateral investments on the Return Date, (ii) non-Cash Collateral
comprising securities Collateral, the greater of the Market Value of such
Collateral on the (A) Business Day immediately preceding the Return Date and
(B) Return Date, or (iii) non-Cash Collateral comprising Letter of Credit
Collateral, the Market Value of the Letter of Credit Collateral on the date of
initial pledge as adjusted for any subsequent marks-to-market through the
Return Date. Market Value shall be determined by Chase in accordance with the
applicable MSLA, including the computation of Dollar equivalents where
Securities on Loan and/or Collateral (and Proceeds) are denominated in a
currency other than Dollars. Where Cash Collateral and non-Cash Collateral
have each been allocated to a Loan as of the Return Date, the Difference
payable by Chase shall be computed in accordance with the foregoing as if there
had been two Loans in effect on the Return Date, one collateralized by Cash
Collateral and the other collateralized by non-Cash Collateral. In lieu of
paying Lender the Difference, Chase may, at its sole option and expense,
purchase for Lender's account ("Buy-in") replacement securities of the same
issue, type, class, and series as that of the Securities on Loan.
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(d) Subrogation. If Chase makes a payment or a purchase pursuant to
Section 7(b) or effects a Buy-in pursuant to Section 7(c), or if Chase effects
a Difference payment pursuant to Section 7(c) on account of a failure to return
Securities on Loan not arising from an Insolvency Event, Chase shall, to the
extent of such payment, purchase, Difference payment or Buy-in, be subrogated
to, and Lender shall assign and be deemed to have assigned to Chase, all of its
rights in, to and against the Borrower (and any guarantor thereof) in respect
of such Loan, any Collateral pledged by the Borrower in respect of such Loan,
and all proceeds of such Collateral. In the event that Lender receives or is
credited with any payment, benefit or value from or on behalf of the Borrower
in respect of rights to which Chase is subrogated as provided herein, Lender
shall promptly remit or pay to Chase the same (or its Dollar equivalent) but
only to the extent that Lender has been paid all amounts owed to it by
Borrower.
Section 8 - Chase Compensation
(a) In connection with each Loan hereunder, Lender shall pay to Chase
a fee equal to ___% of (i) earnings (less any Rebate paid by Chase to a
Borrower) derived from Authorized Investments in connection with Loans
collateralized by cash, and (ii) any Securities Loan Fee paid or payable by the
Borrower on Loans not collateralized by cash. (b) The fee payable to Chase for
services performed pursuant to Section 5(f) hereof shall be equal to one tenth
of the one percent (0.1%) of the Fund's average daily Assets (with "Fund" being
as defined in Appendix 4 hereto). All securities in the Fund shall be valued
based on their amortized cost. Fees shall be accrued and charged daily against
the Fund's yield or assets, as appropriate, and shall be payable monthly in
arrears on the first business day of the month following the month in which
earned. (c) Chase is authorized, on a monthly basis, to charge all the
foregoing fees (together with reasonable expenses incurred by Chase hereunder)
and any other amounts owed by Lender hereunder against the Account and/or a
Collateral Account.
Section 9 - Taxes
Lender shall be responsible for all filings, tax returns and reports
on any Loans undertaken by Chase on Lender's behalf which are to be made to any
authority whether governmental or otherwise and for the payment of all unpaid
calls, taxes (including, without limitations, any value added tax), imposts,
levies or duties due on any principal or interest, or any other liability or
payments arising out of or in connection with any Securities or any Collateral,
and in so far as Chase is under obligation (whether of a governmental nature or
otherwise) to pay the same on Lender's behalf Chase may do so out of any monies
or assets held by it pursuant to the terms of the Agreement or hereunder.
Section 10 - Instructions
(a)(i) Written Instructions. "Written Instructions" shall mean
written communications actually received by Chase from an Authorized Person or
from a person reasonably believed by Chase to be an Authorized Person by
letter, memorandum, telegram, cable, telex, telecopy facsimile, computer, video
(CRT) terminal or other on-line system, or any other method reasonably
acceptable to Chase and whereby Chase is able to verify with a reasonable
degree of certainty the identity of the sender of such communications or with
communications are
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transmitted with proper testing or authentication pursuant to terms and
conditions which Chase may specify. (ii) Oral Instructions. "Oral
Instructions" shall mean oral communications actually received by Chase from an
Authorized Person or from a person reasonably believed by Chase to be an
Authorized Person. Oral Instructions shall promptly thereafter be confirmed in
writing by an Authorized Person (which confirmation may bear the facsimile
signature of such Person), but Lender will hold Chase harmless for the failure
of an Authorized Person to send such confirmation in writing, the failure of
such confirmation to conform to the Oral Instructions received, or Chase's
failure to produce such confirmation at any subsequent time. Lender shall be
responsible for safeguarding any testkeys, identification codes or other
security devices which Chase may make available to Lender or its Authorized
Persons.
(b) Unless otherwise expressly provided, all Proper Instructions shall
continue in full force and effect until canceled or superseded.
Section 11 - Pricing Services
Chase may use any pricing service referred to in an applicable MSLA
and any other recognized pricing service (including itself and any of its
affiliates) in order to perform its valuation responsibilities with respect to
Securities, Collateral and Authorized Investments, and Lender shall hold Chase
harmless from and against any loss or damage suffered or incurred as a result
of errors or omissions of any such pricing service.
Section 12 - Termination
This Lending Agreement may be terminated at any time by either party
upon delivery to the other party of notice specifying the date of such
termination, which shall be not less than 30 days after the date of receipt of
such notice. Notwithstanding any such notice, this Lending Agreement shall
continue in full force and effect with respect to all Loans outstanding on the
termination date, which Loans shall, however, be terminated as soon as
reasonably practicable.
Section 13 - Miscellaneous
(a) Legal proceedings. Chase may refrain from bringing any legal
action or proceeding arising out of or in connection with any Loan until it
shall have received such security as it may require for all costs, expenses
(including legal fees) and liabilities which it will or may expend or incur in
relation thereto.
(b) Integration, Lending Agreement to Govern. This Lending Agreement
and the Agreement contain the complete agreement of the parties with respect to
the subject matter hereof and supersede and replace any previously made
proposals, representations, warranties or agreements with respect thereto by
the parties. In the event of any conflict between this Lending Agreement, and
the Agreement, this Lending Agreement shall govern.
(c) Notice. Unless expressly provided herein to the contrary, notices
hereunder shall be in writing, and delivered by telecopier, overnight express
mail, first-class postage prepaid,
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delivered personally or by receipt courier service. All such notices which are
mailed shall be deemed delivered upon receipt. Notices shall be addresses as
follows (or to such other address as a party may from time to time designate on
notice duly given in accordance with this paragraph): notices to Chase shall
be addressed to it at 2 Chase Xxxxxxxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Securities Lending Division; notices to be given to Lender
shall be addressed to it at its offices at Attention:
.
(d) Amendments, Waiver. This Lending Agreement may be modified only
by a written amendment signed by both parties, and no waiver of any provisions
hereof shall be effective unless expressed in a writing signed by the party to
be charged.
(e) Government Law, Consent to Jurisdiction, Waiver of Immunity. This
Lending Agreement shall be construed in accordance with laws of the State of
New York, without regard to the conflict of laws principles thereof. Chase and
Lender each hereby consents to the jurisdiction of a state or federal court
situated in New York City, New York in connection with any dispute arising
hereunder and Lender hereby waives any claim of forum non conveniens to the
extent that it may lawfully do so. To the extent that in any jurisdiction
Lender may now or hereafter be entitled to claim, for itself or its assets,
immunity from suit, execution, attachment (before or after judgment) or other
legal process, Lender irrevocably shall not claim, and it hereby waives, such
immunity.
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(f) Counterparts, Headings. This Lending Agreement may be executed in
several counterparts, each one of which shall constitute an original, and all
collectively shall constitute but one instrument. The headings of the sections
hereof are included for convenience of reference only and do not form part of
this Lending Agreement.
(g) Severability. Any provisions of this Lending Agreement which may
be determined by competent authority to be prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition, or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceably in any
jurisdiction shall not invalidate or render unenforceable such provisions in
any other jurisdiction.
IN WITNESS WHEREOF, the parties have executed this Lending Agreement
as of the date first above-written.
[Insert name of LENDER] THE CHASE MANHATTAN BANK, N.A.
By: By:
Title: Title:
